U.S. SEC Sues Justin Sun; Claims TRX & BTT Are Crypto Securities

The U.S. Securities and Exchange Commission has leveled multiple charges against the crypto mogul Justin Sun and three of his related companies, one of which is the well-known Tron Foundation Limited. These charges include the unregistered offer and sale of two unregistered cryptocurrencies as well as allegations of engaging in market manipulation and conducting airdrops involving similar securities.

SEC Files Lawsuit Against Justin Sun

On Wednesday, the SEC announced in a press release that it would be bringing a lawsuit against Sun, the Tron Foundation, the BitTorrent Foundation, and Rainberry regarding the sale of Tron (TRX) and BitTorrent (BTT) tokens as the watchdog considers them to be unregistered crypto asset securities. In a separate allegation, the regulator stated that the defendants engaged in “extensive wash trading” as part of a larger ploy to “fraudulently manipulate” TRX’s secondary market.

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Sun, who got mainstream fame after attending the grand $4.5 million dinner with Warren Buffet back in 2020, allegedly tried to artificially inflate TRX’s trading volume through wash trading by having his own employees “engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled.”

The SEC was quoted as saying:

This scheme required a significant supply of TRX, which Sun allegedly provided. As alleged, Sun also sold TRX into the secondary market, generating proceeds of $31 million from illegal, unregistered offers and sales of the token.

According to the official documents published by the SEC, the daily volume of TRX traded through these wash trades ranged anywhere between 4.5 million and 7.4 million TRX.

SEC Charges 8 High Profile Celebrities

In addition, the SEC filed charges against eight well-known celebrities for illegally advocating TRX and BTT without disclosing that they were being compensated for doing so. These include noteworthy individuals such as actress Lindsay Lohan, media personality Jake Paul, rapper DeAndre Cortez Way — also known as Soulja Boy — singer Austin Mahone, and four other celebrities who make up this group.

However, the SEC stated that the celebrities, with the exception of Cortez Way and Mahone, agreed to pay a total of $400,000 to settle the accusations. This amount includes disgorgement, interest, and penalties while neither party admitted nor denied the SEC’s findings.

In light of this recent news, TRON’s native cryptocurrency, TRX, has fallen victim to widespread fear and panic selling. As things stand, the price of Tron is currently exchanging hands at $0.05 which represents a drop of 13.43% in the past 1 hour as opposed to a decrease of 14.06% recorded over the last 24 hours.

Also Read: Arbitrum Gets Listing Approval From This Major U.S. Exchange; ARB Price To Rally Post Launch?

Pratik has been a crypto evangelist since 2016 & been through almost all that crypto has to offer. Be it the ICO boom, bear markets of 2018, Bitcoin halving to till now – he has seen it all.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.